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Effective Corporate Income Tax Burden in Croatia

Author

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  • Hrvoje Šimović

    (Faculty of Economics and Business, University of Zagreb)

Abstract

This paper provides an analysis of corporate income tax (CIT) in Croatia. Given the fact that Croatia implements a consumption-based CIT and a number of tax incentives, the purpose of this paper is to establish the level of effective tax burden on companies in Croatia. In addition to analyzing the basic indicators of the CIT burden, the paper also presents a calculation of the effective tax rate based on the application of the Devereux-Griffith methodology. Apart from the cost of capital, the effective marginal tax rate (EMTR) and the effective average tax rate (EATR), also the EATR will be calculated for cases in which tax holidays are used.

Suggested Citation

  • Hrvoje Šimović, 2009. "Effective Corporate Income Tax Burden in Croatia," EFZG Working Papers Series 0902, Faculty of Economics and Business, University of Zagreb.
    • Handle: RePEc:zag:wpaper:0902
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    References listed on IDEAS

    as
    1. Hrvoja Šimović, 2008. "Porezni poticaji za izgradnju konkurentnosti," EFZG Working Papers Series 0803, Faculty of Economics and Business, University of Zagreb.
    2. Devereux, Michael P & Griffith, Rachel, 2003. "Evaluating Tax Policy for Location Decisions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(2), pages 107-126, March.
    3. King, Mervyn A. & Fullerton, Don, 2010. "The Taxation of Income from Capital," National Bureau of Economic Research Books, University of Chicago Press, number 9780226436319, June.
    4. Michael Overesch, 2005. "The Effective Tax Burden of Companies in Europe," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(4), pages 56-63, 01.
    5. Michael Devereux & Rachel Griffith, 1998. "The taxation of discrete investment choices," IFS Working Papers W98/16, Institute for Fiscal Studies.
    6. European Commission, 2008. "Taxation trends in the European Union: 2008 edition," Taxation trends 2008, Directorate General Taxation and Customs Union, European Commission.
    7. Michael P. Devereux & Rachel Griffith & Alexander Klemm, 2002. "Corporate income tax reforms and international tax competition [‘Do domestic firms benefit from direct foreign investment? Evidence from Venezuela’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 17(35), pages 449-495.
    8. Mervyn A. King & Don Fullerton, 1984. "The Theoretical Framework," NBER Chapters, in: The Taxation of Income from Capital: A Comparative Study of the United States, the United Kingdom, Sweden, and Germany, pages 7-30, National Bureau of Economic Research, Inc.
    9. European Commission, 2013. "Taxation trends in the European Union: 2013 edition," Taxation trends 2013, Directorate General Taxation and Customs Union, European Commission.
    10. Michael Overesch, 2005. "The Effective Tax Burden of Companies in Europe," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(04), pages 56-63, January.
    11. repec:ces:ifodic:v:3:y:2005:i:4:p:14567579 is not listed on IDEAS
    12. European Commission, 2001. "Company Taxation in the Internal Market," Taxation Studies 0005, Directorate General Taxation and Customs Union, European Commission.
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    Cited by:

    1. Bubanić Marijana & Šimović Hrvoje, 2021. "Determinants of the effective tax burden of companies in the Telecommunications activities in the Republic of Croatia," Zagreb International Review of Economics and Business, Sciendo, vol. 24(2), pages 59-76.

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    More about this item

    Keywords

    Effective tax rates; corporate income tax; tax holidays; Croatia;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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